The skilling challenge - How to equip employees for the era of automation and digitization - and how models and mindsets of social entrepreneurs ...
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The skilling challenge How to equip employees for the era of automation and digitization – and how models and mindsets of social entrepreneurs can guide us
The skilling challenge
Contents
Automation will create more jobs than it cuts.
The skill gap is likely to be the real problem............................... 6
Required future skills are not just digital skills:
human and meta skills also become extremely important.......... 8
Organizations need to radically change how
they conceptualize their skilling.............................................. 10
Organizations need to start to develop their skilling
agenda now – but other stakeholders will need
to play their role, too............................................................... 19
The report is the result of collaborations between Ashoka Germany and McKinsey & Company, Inc.
The underlying analysis builds on interviews with leading experts, including among others
several Ashoka Fellows and experts on the skilling challenge in the private and public sector.
The authors thank these experts for their invaluable contributions.
5Automation will create more jobs than it cuts. The skill gap
is likely to be the real problem
Within the next 10 to 20 years, 65% of all activities that are currently performed by humans
will be automatable. According to a report from the McKinsey Global Institute on “Harnessing
automation for a future that works”1, 50% of all tasks currently performed by humans are
automatable with technology available today. Another 15% will be automatable soon; the
remaining 35% of tasks currently performed by humans will not be automatable soon.
While many jobs will become obsolete, automation and the resulting increase in productivity
will also create new jobs (Exhibit 1). According to current forecasts, automation will replace
about 15% of jobs in Western economies. At the same time, new positions equal to 21% of
today’s labor demand will be created, mainly because of rising incomes, healthcare for ageing
populations, investments in infrastructure, buildings and energy, as well as technological
development and a growing market for previously unpaid work 2.
Exhibit 1 While many jobs will become obsolete, automation and the ROUGH ESTIMATE
resulting increase in productivity will create new jobs
Estimated change of labor
demand until 2030 globally,
Demand driver Explanation Mio. employees
Baseline labor Baseline labor demand, in world
0 ~ 0%
demand without automation
Jobs replaced Jobs replaced by automation
-400 ~ 15%
by automation1
Potential jobs created from
New jobs created 7 catalysts of labor demand, e.g., +390 ~ 14.6%
directly by automation2 rising incomes, ageing health care,
technology spending
Incremental job Incremental job creation from step-up
creation from step-up scenario, e.g., added investments in +165 ~ 6.2%
scenario2 infrastructure, real-estate construction
Net effect on future +155 ~ 5.8%
labor demand
1 Based on mid-point adoption scenario 2 Based on low-demand-for-work scenario
SOURCE: McKinsey analysis
1 https://www.mckinsey.com/global-themes/digital-disruption/harnessing-automation-for-a-future-that-works
2 https://www.mckinsey.com/global-themes/future-of-organizations-and-work/what-the-future-of-work-will-
mean-for-jobs-skills-and-wages
6Accordingly, automation has the potential to create more positions in the coming years than
it will cut. However, in order to ensure full employment, many workers – the latest MGI report
“Future of Organizations and Work” estimates 75 to 275 million workers (i.e., 3 to 14% of the
global workforce) – will need to switch occupational activities. In Germany, up to 32% of the
workforce will have to switch occupational activities until 2030.
It is thus not the quantity of jobs that is the issue, but rather that there is a gap between
the skill requirements of the old and new jobs. This skill mismatch could become the main
problem for the labor market (Exhibit 2). In the worst-case scenario, the result will be millions
of unemployed despite massive numbers of vacant positions, and the related overall economic
costs of this worst-case scenario could easily exceed EUR 1 trillion for Germany alone by 2030.
Exhibit 2 Maximize overlap between capabilities and needed skills
Current capabilities New skills needed
Cost of Cost of
layoffs skill gaps
This report therefore focuses on innovative answers how to manage the radical shift required
for skilling the labor force in these times; other factors that impact the quantity of jobs and
the skills required are further detailed in the latest MGI report3.
3 https://www.mckinsey.com/global-themes/future-of-organizations-and-work/what-the-future-of-work-will-
mean-for-jobs-skills-and-wages
7Required future skills are not just digital skills: human and
meta skills also become extremely important
The disruptions of digitization will not make all jobs “digital“. On the contrary, those activities
that are inherently human and therefore not automatable will gain importance (Exhibit 3).
Exhibit 3 21st century skills include renowned digital skills, but also human skills as
well as meta skills as an overarching element
Meta skills
Flexibility and adaptability Initiative and self-direction Leadership and responsibility
Embrace change Manage goals and time Be a changemaker
Be flexible Work independently Guide and lead others
Be self-directed life-long learner Be responsible to others
Digital skills Human skills
Digital skill level Example skills
Digital Expert Produce IT products and services (such as Creativity and innovation
programming, developing applications, Think and work creatively with others
managing networks) Implement innovation
Optimize search engines, e.g., for marketers
Critical thinking and problem solving
Digital Fluent Participate in online spaces and online services Reason effectively
Use several programming languages Use system thinking
Can solve almost all problems using digital Make judgements and decisions
technology Solve problems
Digital Use of digital technologies for professional
Social intelligence
Literate purposes
Communicate clearly
Accessing information online or using
Collaborate with others
relevant software
Be empathetic
Digital Save and store files
Aware Communicates mobile Productivity and accountability
Aware of collaboration tools Manage projects
Aware of security issues Produce results
SOURCE: P21 framework; OECD; European Commission; World Bank; team analysis
Within the digital skills and human skills needed in the future, we can distinguish those that
are required for newly created jobs and those that are needed for an existing job (Exhibit 4).
This has an effect on the depth and the goal of respective skilling measurements:
Upskilling: Additional digital skills for an old job; examples are checkout clerks who need to
learn how to assist customers with checkout machines, and how to maintain these machines.
Another example could be an assembly line worker whose role continuously shifts from actively
assembling towards quality control and the ability to troubleshoot the machines.
Digital reskilling: Acquiring skills for an ICT job. This could be in robot manufacturing, cloud
computing, data engineering, etc. The boundaries between II and III can become somewhat
blurred: online marketing, for example, could still be regarded an “old” job because it still fulfills
the same aim, but the activities and required skill set differ significantly and are oftentimes
complementary to traditional offline marketing.
8Human reskilling: Acquiring/rediscovering skills for a job in which human skills are particularly
needed; jobs in this area will grow strongly where the “human” touch is deemed the main
unique selling point (USP) in a world where products are otherwise produced by machines.
Highly relevant examples of these jobs include customer service and customer care: advising
customers, understanding them, offering them a set of products tailored to their needs, and
assisting them with problems.
Exhibit 4 Different types of skilling can be differentiated, meta skilling for the workforce
at large, as well as upskilling and reskilling
1
1 Meta skilling: Enable individuals to
develop a new mindset embracing life-
New skills required to Digital skills required
long learning and other overarching
work and interact to create, steer, and
Digital life skills
with new technology maintain technology
skills
in an old job in newly created ITC
jobs 2 Upskilling: Teaching employees the
skills they need to do old jobs with new
Required skills technology
(of labor supply)
2 3
3 Digital reskilling: Teaching skills to
program, design, or apply technology
Some (niche) parts Inherently human skills on complex tasks
of the labor market necessary for new
“Human” will not be automated non-ICT jobs
skills and need no
(re)skilling 4 4 “Human” reskilling: Enabling people
to (re)discover learning and innovation
skills, personal strengths, and hidden
talents
Existing New
Jobs (labor demand)
But digitization also disrupts the way we work at large, leading to a labor market that is
defined by volatility, uncertainty, complexity, and ambiguity – this is true for individuals as
well as organizations. The skills needed to thrive in this new environment that has evolved
beyond repetitive work and predictable career paths are referred to as “meta skills” in this
paper. Accordingly, the acquisition of these meta skills is called “meta skilling”.
Meta skills revolve around adaptability, self-direction, leadership, and entrepreneurial mindset.
They are almost identical to what Ashoka calls “changemaker skills”: cognitive empathy,
teamwork, leadership, and creativity. Sadly, most young people would not count these among
the most important skills they learned at school. But today, every single person in the labor
market will need these meta skills – not only for reasons of personal life satisfaction and to be
an active citizen and problem solver for society, a changemaker. But also because, across
all industries, meta skills offer by far the most long-term value for employability. Upskilling
and reskilling are necessary as short-term measures to master a single wave of technical
innovation. However, the multiple waves that follow are much easier to master when employees
have already been trained in how to deal with change, how to identify and set goals for their
own career and learning paths, and how to effect change using their own initiative – both in
organizations and in society at large.
9Organizations need to radically change how they concep-
tualize their skilling – only few examples exist at present
If we consider the current status of skilling in public and private sector organizations, it is clear
that we are not at square one: Across all industries and sectors, many organizations have
understood that skilling is the answer to many of the challenges brought about by digitization,
and they are already seeing bottlenecks today. 55% of European executives believe they will
need to retrain or replace more than a quarter of their workforce between now and 2023 due
to advancing automation and digitization4. Nevertheless, organizations still seem to think in
the old paradigm of skilling, and fail to appreciate that the reach, pace, and depth of skilling
for the digital labor market is unprecedented and requires a completely new mindset and
approach. It also requires new structures.
This chapter explores the current status quo of skilling in public and private sector organizations
across six dimensions. For each of them, we also offer an alternative mindset and approach with
new imperatives, outlining the target scenario for the future and illustrating it with practical examples
of organizations that are frontrunners in some of these dimensions. Some of these examples are
taken from large international corporations that are already putting some of our theory into practice.
Approaches that truly shift mindsets, however, can be found in the examples of highly innovative
social entrepreneurs, who have pioneered the philosophy and shift in mindset that is needed.
Dimension 1: Strategic foresight and coherence
Use collective intelligence to link strategy and skilling agenda!
While organizations report a massive skill gap to realize their digital agenda, only 4% of
companies have aligned their training program with this digital agenda. Looking at the skilling
programs created in recent years, we can see some initial approaches as to how to reskill
and upskill parts of the organization, sometimes even achieving an impressive scale within
the whole organization. However, there is no strategy detailing how to adapt holistically to the
disruptions of a digital world – this should be the starting point and baseline to any skilling
program. Thinking about how to adapt to a digital world means defining an organization’s
future relevance in this digital world, and it is fundamentally linked with the future role of each
and every individual in an organization – this is therefore more than just a simple strategy
exercise of the C-level, and the result is more than just a digitization strategy.
4 https://www.mckinsey.com/global-themes/future-of-organizations-and-work/retraining-and-reskilling-
workers-in-the-age-of-automation
10Exemplary It is not easy to bring everybody to the table. However, social entrepreneurs have excelled in
social developing and applying empowerment and participation models. One example is Ashoka Fellow
entrepreneurs
Frank Escoubes from Canada with his tech start-up Bluenove. He specializes in harnessing
the collective intelligence of public and private organizations, empowering everyone to become
“inventors of a world that is possible”. Bluenove works with multinational companies, public
entities, and governments to run large scale debates (deliberations through structured online
conversations) on strategy, transformation, and leadership issues.
In a recent project, Frank worked with a French national telecommunications company, where
20,000 employees from around the world came together online for two months to co-design
the future leadership model of the company. Such processes not only revolutionize decision
making through the massive engagement of thousands of stakeholders, but are often also
the first real digital experience for many employees, going beyond the typically shallow
engagement level in conventional corporate social networks.
Another aspect regarding a strategy for the digital world is that it is never final. It will constantly
evolve and needs a very agile approach to implementation.
Dimension 2: Holistic scope
Go beyond upskilling!
A holistic strategy for the digital age will also lead to a holistic scope of skilling programs. As
described, the future role of an organization is linked to the future role of employees in this
organization – and depending on their skills and interests today, it allows us to deduct the
required levels of meta, up- and reskilling. At the same time, it is also important to acknowledge
that the labor market in a digitized world is not a fixed target state, it is the pinnacle of an
ever-evolving system. Training programs need to constantly evolve with it.
What we see today is that the main focus is on upskilling of digital basics that are directly
related to the job description, but with very little attention paid to meta skills and helping
employees to understand and leverage existing “hidden“ skills – both of them are of overarching
importance. It is these meta skills that are the basic core of skilling because they define the
purpose and the relevance of lifelong learning and enable individuals to become active drivers
of their learning program.
When it comes to “human” skills, there is only so much you can teach and learn – and to
a large extent, it is about “rediscovering” them, acknowledging that they have often been
ignored or played down as “soft” skills.
11Many Ashoka Fellows work on digital upskilling initiatives that include human and meta
skills – often working with the unemployed or with other disadvantaged groups to prepare
them for corporate jobs.
Exemplary Jose María Luzárraga from Spain founded MTA Academy as a part of Mondragon, one of
social Spain’s largest corporations with 75,000 employees. Working in various programs, students
entrepreneurs
and employees create a real “learning” venture that they lead together as a team. This
“teampreneurship through experimentation” approach has led to more than 50 new companies
and numerous intrapreneurial initiatives. All MTA graduates describe it as a turning point in
their personal and professional lives.
Mariana Costa from Peru identifies young women from underserved backgrounds, equips
them with skills for the digital economy, and connects them to the rapidly growing tech sector
job market. Unlike other education and training approaches, her organization Laboratoria
also prioritizes personal growth and the development of social and emotional skills such as
perseverance, self-confidence, and teamwork. Over 800 web developers have graduated from
Laboratoria across Peru, Chile, and Mexico, with placement rates of over 80% in their latest
cohorts. It plans to become the leading source of female tech talent in Latin America by 2020.
Foundation Santa María la Real from Spain, lead by José María Pérez, helps the unemployed
to re-enter the labor market with new skills and an entrepreneurial attitude. His program
Lanzaderas is based on groups of unemployed people offering mutual support and their
ability to work in teams. Each group consists of 20 volunteers aged between 20 and 60,
who agree to work together, help each other to find a job, take up a new activity, or improve
their professional qualifications. Their placement rates are 25% higher than other models.
Recently, Google and Lanzaderas co-created a MOOC to prepare people for digital jobs –
with Lanzaderas contributing its experience in creativity, teamwork, and other human skills.
Assessing hidden skills does not mean starting with what employees should know and be
able to do based on their current job description and CV (and prescribing training based on
that), but rather starting with what these people are actually good at and like to do. Similarly,
looking at skills which are related to currently required skills may reveal additional suitable jobs
for these employees – employers can consciously provide tools that help people to identify
these on their own. This will further enable them to identify their next potential role and the
corresponding upskilling and reskilling programs required.
12Exemplary Amazon is an example of a corporate player who introduced skilling opportunities that reach
corporate far beyond the current job description and even the company. Their Amazon Career Choice
program
program launched in 2012 is also a frontrunner in its collaboration with public entities (e.g.,
labor and certification agencies). So far more than 10,000 workers from 10 countries have
participated in the Career Choice program with expectations of reaching 20,000 by 2020 in
the US alone.
Degrees can be obtained in skills relevant for Amazon, but also external high-demand
occupations as identified by public labor agencies (e.g., transportation, healthcare, mechanical
and skilled trades as well as IT and computer science in the US).
The Career Choice Program pre-pays 95% of tuition and fees for employees to earn certificates
and associate degrees. Depending on the country of participation one to two years of tenure
are required. The financial assistance goes up to EUR 2,000 per year for up to four years.
Dimension 3: Mindset of organizations and individuals
Empower employees to manage themselves!
“Culture” is the single biggest hurdle that companies cite when it comes to implementing their
digital transformation. Conversely, the kind of culture that is a barrier to the transformation is
upheld by the leaders of many of these corporates, who seem to believe that having a digital
training offer is an end in itself (Exhibit 5).
Exhibit 5 Which are the most significant challenges to meeting digital priorities
in your organization?
Percent of respondents
Cultural and behavioral challenges 33
Lack of understanding of digital trends 25
Lack of talent for digital 24
Lack of IT infrastructure 22
Organizational structure not aligned 21
Lack of dedicated funding 21
Lack of internal alignment (digital vs. traditional business) 19
Business process too rigid 16
Lack of data 13
Lack of senior support 13
SOURCE: McKinsey “Culture for a digital age”; McKinsey team analysis
13While every organization can and should have their own interpretation of what a digital culture
can mean for them, there are common aspects of this culture that will become almost obligatory:
• Rewarding an agile way of working and dissolving hierarchies and decision cycles that
stand in the way
• Acknowledging the importance of lifelong learning for the corporation and for the individual;
creating flexible structures that allow people to discover and shape their learning agenda.
Exemplary One of the most radical and consequential examples of an agile culture was created by
social Ashoka Fellow Jos de Blok from the Netherlands. His home-care company Buurtzorg with
entrepreneurs
10,000 nurses and 4,000 care workers consists entirely of more than 900 independent,
self-directed nurse teams. Classical leadership positions do not exist and the nurse teams
have full autonomy over all decisions regarding their daily work. The admin staff of the whole
company amounts to around 50 employees. The result is not only unprecedented levels of
collaboration and collective wisdom to drive forward the company’s strategy, but Buurtzorg
has also been selected as the most attractive Dutch employer four times in a row and has
higher patient satisfaction than all competitors.
Overall, there is little recognition among employers or employees of the fact that the age of
digitization requires a whole new culture of lifelong learning building on the right meta skills.
In the “traditional” paradigm of corporate learning, the top management and supervisors
decide where their employees should develop, what they need to learn and how they do
it. Acknowledging that the digital age will require people to adapt to a new working world
much more frequently than before – and that this adaption may often also mean changing
profession several times in a career – employers will need to give their employees much more
space, and empower them to drive their own learning agenda.
Accordingly, empowering employees to discover their own strengths and development
potentials and become proactive drivers of their own change. Applying the same principles
for the corporation: making it more dynamic, constantly developing and re-inventing its role
and purpose by involving the grass roots of the organization, and turning away from the top-
down approach where possible.
Another aspect of the static traditional culture is also how private and public-sector organizations
typically deal with overcapacities – and this is an area where yet another shift in mindset
is needed. Employee overcapacities/redundancies are typically regarded as a liability – a
hurdle on the way to realizing a new strategy. Mostly benevolent, corporations seek to
reduce this liability where they can, and approaches to doing so include early retirements
and lay-off payments, as well as – where possible – looking for open positions within the
same organizations that could be an alternative.
14This search for an alternative position rarely involves skilling – the skill set of those that need
a new position is fixed – and analogously, organizations seldom look for a long-term solution,
anticipating the needs for new talent early. In summary, there is often no long-term strategy
for skilling and job rotations within companies.
Looking at the numbers discussed up front, we see how millions of people will lose their
jobs, yet even more new positions will be created. The scarcity of skilled labor could stretch
to many more areas than those where it already prevails – in many digital jobs, for example,
demand is outgrowing supply more than fourfold, and vacancy periods for open positions are
rising in many areas. Indeed, lost productivity due to dramatically increasing vacancy periods
could be digitization’s biggest cost driver in the labor market, and even today, it is a top-3
hurdle to a successful digital transformation in companies. Organizations that understand
this early have a clear advantage – the new paradigm will be to regard labor overcapacities
as a major asset, and early/anticipatory reskilling opportunities as the key to unlocking and
utilizing their potential instead of provoking their redundancy.
To enable this type of reskilling, we need to rethink education – a new qualification does
not need a university diploma or long-term apprenticeship. We need shorter-term training
programs (on and off the job) that allows people to work and train at the same time.
Exemplary The social enterprise Simplon, founded by Ashoka Fellow Frédéric Bardeau, is a great example
social that shows how significant numbers of employees can be upskilled and reskilled – and even
entrepreneurs
how employees with little or no prior knowledge can be trained in complicated and complex
topics in short-time frames. Simplon helps companies to upskill and digitally reskill their
employees with a full- or part-time six-month in-house training curriculum. It adopts a variety
of reskilling approaches ranging from in-class training and blended learning approaches to
at-point hackathons. Simplon has already organized 24 hackathons for companies such as
Arte, Orange, and SNCF Réseau. Peer-to-peer training by colleagues from the original target
group facilitate a shift in mindset toward enthusiasm for the new skills.
Simplon is a story of great success. Frédéric has already worked with 23 companies and
has trained more than 1,000 company employees. He is piloting a large-scale digital skilling
program for the French Postal Service, BNP Paribas, and the French Unemployment Agency.
He is also currently working on a program to digitally reskill 12,000 employees at L’Oréal.
15Dimension 4: Scale and range
Train everybody, not just senior management!
There are a variety of good examples of skilling programs already embracing many of the
aspects raised in this report – conversely, these often tend to get stuck at senior level –
enabling the top management to train and develop critical new skills and embrace a mindset
of lifelong learning and agile working. Of course, corporate change needs this top-down
element, and it is an important lever in activating and motivating leadership on the journey
toward a digitized working world – but programs should not stop there. Accordingly, in the
new mindset, any exclusive skilling offer for the leadership of an organization includes an
approach for translating insights and newly acquired mindsets into effective change at large.
A significant hurdle to large-scale training programs is time: most companies cannot afford
to have their employees participating in multiple training boot camps while the day-to-day
work remains undone. What is needed are new approaches as to how large-scale in-service
training can become a reality. That is, programs that allow employees to follow their training
goals on the job and sparing some dedicated time during the week for training, while still
allowing for their normal work to be done and without compromising the employees’ work-
life balance.
There is no one-size-fits-all solution to this. Instead, organizations should feel encouraged to
think of new ways to make in-service training happen.
Exemplary One example is the online company Alison, created by Ashoka Fellow Mike Feerick from
social
Ireland. Alison is one of the world’s largest online learning platforms with around 12 million
entrepreneurs
learners and 1.5 million graduates. It offers more than 1,000 courses on workplace skills,
from business English to IT skills to classic soft skills. All courses are free of charge and self-
paced. Thus, learners are not restricted to specific hours, but can set their own learning times
and paths. Alison is creating new employment opportunity for graduates present in every
country and works with corporations, NGOs, and governments as well as individuals worldwide.
Another example that is less in-service, but definitely out-of-the-box is MAAM, a social venture
founded by Ashoka Fellow Riccarda Zezza from Italy. MAAM provides companies with a
blended (digital and life-based) training program suited to employees with children up to three
years of age, that transforms the parental experience into an opportunity to improve their
human and meta skills. The program can be accessed from home also by pregnant women
and employees on parental leave. Employers and managers receive a closing aggregate
report when the employee completes the program. MAAM is involving thousands of users in
Italy and international pilots are taking place in over 10 countries worldwide. After self-rating
their skills development, users show significant improvement, for example, time management
and setting priorities show a 31% improvement, communication a 25% improvement, and
decision making a 22% improvement.
16Dimension 5: Affordability
Benefit from smart business models that cut prices dramatically!
For many skilling programs that stop at the top management, the high costs are the reason
not to roll it out any further. Indeed, skilling a large organization for a digital world requires
significant investment, but there are ways to make programs more affordable.
Exemplary One example is Simplon, mentioned above, which uses a low-budget, yet high-impact skilling
social approach. Similarly also, Alison’s courses are all free – a core feature of a platform built by a
entrepreneurs
social entrepreneur who wants to close the education gap worldwide. Alison makes money
through advertising, merchandise, and the sale of optional certificates and diplomas to
graduates and companies.
David Cuartielles, another Ashoka Fellow, and his Arduino Verkstad serve as another example
demonstrating how high-impact skilling can be very affordable. He developed a toolkit to
teach digital skills to young students. The toolkit consists of more than 20 hands-on and
easily-assembled electronic projects, an online source for course materials, documentation
tools, content-specific reference sections, and professional support services. The product
was based on a hardware toolkit that at that time retailed for more than USD 1,000. He was
able to offer it for as little as USD 25. This meant that 15,000 students could be trained in
digital skills at over 500 schools. 90% of the students state that, after the training, they want
to learn more about programming.
The last two examples also prove that expensive external experts are not always needed to
conduct effective and meaningful training; Simplon uses very effective peer-to-peer training
where formerly unskilled trainees turn into teachers, and the training package from Arduino
is applied by teachers with little or no prior education or knowledge in this field.
17Dimension 6: Impact measurement
Make skilling goals concrete and testable!
After screening numerous corporate learning programs, a striking bottom line is that it is very
hard to judge their actual effectiveness because impact measurement remains anecdotal
at best; oftentimes, the desired goals and target impact of learning programs are entirely
missing. It is high time to change this: we suggest that the definition of skilling goals and their
evaluation sits not only at the core of every skilling program, but also at the core of every
employee performance dialog. This is the only way to ensure the continuous development
needed in an ever faster changing system.
Exemplary For example, Alison’s courses conclude with an assessment where learners must show an
social 80% pass rate. However, graduates must also be ready to take a similar online, on-the-spot
entrepreneurs
test whenever someone challenges them, for example, when applying for a job or in the event
of internal company checks. This ensures that diplomas do not lose their value over time and
that learners are able to retain and progress their knowledge.
Another Ashoka Fellow offers a very vivid illustration of the importance of impact measure-
ment: Tom Ravenscroft and his social venture Enabling Enterprise is a very strong advocate
of “Essential Skills”, a combination of typical soft skills and those that are needed to be
successful in the workplace. Tom found that schools do not explicitly teach these skills,
and many students are insufficiently prepared for the working world. He was the first to
identify the main reason: teachers neglected teaching these skills because they could
not measure them and therefore could not grade them. Tom developed a framework and
tool called “Skills Builder” with quantified measures and benchmarks based on the school
years and covering eight “Essential Skills” such as listening, staying positive, problem
solving, aiming high, and creativity. So far, Tom has taught 85,000 students these “enterprise
skills”. This example shows that skills that are often deemed hard to measure are in fact
measurable – it is an example that should also inspire companies with their own skilling programs.
18Organizations need to start to develop their skilling agenda
now – but other stakeholders will need to play their role, too
To make the target picture described in previous chapter a reality and the transition a success,
all relevant stakeholders will need to contribute and play their roles. This includes individuals,
social entrepreneurs, educational institutions, and industry associations, labor agencies, and
the Legislative, which need to create the much-needed ecosystem for the future of skilling
in the labor market. In particular, they need to cooperate on skilling at a much larger scale
than they have traditionally done so in the past.
Exhibit 6 Next steps for organizations taking on the skilling challenge
Define the missing
Encourage and skilling program
empower employees elements and identify
to discover their new relevant content
hidden talents and and formats
help to develop the
Help employees skilling agenda
on all levels to
develop the
new mindsets
Identify relevant partners (e.g.,
Run a supply Embed skilling into Combine skilling social entrepreneurs, industry
and demand the structures and diagnostics and associations and labor agencies)
skilling processes of the program development to implement skilling agenda
diagnostic organization as two interlocking
elements
Companies and other organizations eager to get started will connect their skilling agenda
to their agile organizational strategy and involve the entire organization. This means that the
skilling road map is not sequential, or a one-time or top-management topic only. Instead, it
is as agile as the organization and its strategy itself. To get started, however, organizations
can take the following steps (Exhibit 6):
1. Run a skill supply and demand diagnostic to understand the extent of your
organizations’ current and future skill challenge. The HR department needs to make
a serious effort to understand the exact skill requirements of each department now and
in the next three to five years. At the same time, organizations need to better document
and understand the skill levels that their employees have. For the definition of future skill
demands, the company’s strategy serves as a starting point and employees at all levels
are involved in order to define the skills they need to grow in future roles of the company.
19To analyze the current skill supply inside the organization, current job descriptions and
the resulting skills can only serve as a starting point. Companies also need new systems
and tools that allow employees to report their “hidden” skills and interests. These skills
and interests do not have to be related to the employees’ current role as they could still
be relevant for a completely different future role.
2. Embed skilling in the organization’s core processes. The supply and demand diagnostic
will result in a skill gap analysis both at a company, but also at an individual employee
level. To close skill gaps, the responsible skilling team reviews the company’s current
training and development programs, and identifies the missing content needed to close
the skill gaps. A skilling road map defines which of the missing content can be developed
bottom-up and in-house, and which needs to be sourced externally. It also identifies which
on-demand, planned, and social learning methods (e.g., web-based training, mobile apps,
learning factories, peer-to-peer training) are most suitable for developing which skills.
Moreover, the entire top-management team should champion the skilling agenda and
have an appointed skilling team with representatives from all company levels to facilitate
its development.
3. Help employees at all levels to develop the mindset as it is the cornerstone of the
future of work. Current and future skills gaps will not be closed simply by constantly hiring
new people. Instead, the bottom-up involvement and skilling of current employees to take
on new roles is a central element of the HR strategy. As explained by Stanford Professor
Carol Dweck5, employees at all levels need to believe that their talents and skills can be
developed (a growth mindset) vs. believing that their talents are innate gifts (a fixed mindset)
to become enthusiastic about change and to be ready to grow and develop new skills all
the time. Only then and only with the appropriate top-management championship can
employees really embrace change.
4. Identify relevant learning partners in the skilling eco-system (e.g., social entrepreneurs,
universities, labor agencies) since companies will not and should not be able to manage
the transition alone.
5 Dweck, C. (2016). What Having a Growth Mindset Actually Means. Available online here.
20To create a successful skilling eco-system, its stakeholders need to take their new responsibilities
seriously and start acting now (Exhibit 7).
Exhibit 7 Skilling eco-system
Legislative
Sets legal and Provides public institutions
economic incentives with funding
Labor
agencies
Companies
Cooperate to create tailored skilling programs for employees
Provide reskilling programs for Individuals Equip with 21st century skills Cooperate to
improve curricula
Pro-actively define their role in Pro-actively seek skilling programs
Educational
institutions
and industry
associations1
Self-
empowerment
Social
entrepreneurs
Inspire paradigm shifts Inspire new skilling approaches
1 Schools, universities, chambers of commerce and crafts, federation of commercial or industrial enterprises, etc.
Individuals that are changemakers will embrace a mindset of lifelong learning and constant
change. They will regularly ask themselves what kind of skills they need and want to acquire to
stay relevant for their current or for any other employer. Changemakers will also not solely rely
on their employers to provide them with relevant skills, but will look for external opportunities
to acquire them.
Social entrepreneurs can become thought partners – not only by providing and developing
affordable and effective skilling programs for specific skill sets as illustrated by the Ashoka Fellow
examples above. But especially by inspiring all other stakeholders to adopt an understanding
of meta skills, i.e., the mindset needed to embrace a world of constant change and how to
learn and act in it in self-directed and entrepreneurial ways.
Educational institutions and industry associations act as enablers as they provide students
with the skills they need for their future. Especially the education system needs to adapt its
curriculum to integrate elements that prepare children for a future of constant chance. To do
so, sufficient time should be allocated to programs dedicated to the development of meta-
and human skills. Moreover, continuous collaboration with companies and labor agencies is
required to identify changes in skill requirements and to adapt curricula more frequently to
meet these changes. Also, new certification programs and degrees will need to be developed
faster so that individuals can realize their lifelong learning aspirations.
21Labor agencies are bridge builders, and should become lifelong counsellors of individuals
as they progress in their careers. Labor agencies should also collaborate more with companies
and educational institutions to support lifelong in-house skilling programs that can enhance
the employment opportunities for individuals inside and outside their current employer and
prevent structural unemployment and its associated costs.
The Legislative is the framework provider and needs to set legal and economic incentives
for companies and individuals to embark on skilling journeys. This could include tax incentives
for participating in or providing skilling programs for both companies and individuals. Moreover,
it could also include more financial funding for labor agencies and educational institutions
to extend skill-counselling efforts and to enable curricula and their respective content to be
adapted more frequently.
The skilling challenge is and will be one of the greatest challenges in the coming decade(s)
and will not be solved on its own. We all need to start working together on the solutions now!
22Key contacts Rainer Hoell Ashoka Germany rhoell@ashoka.org Matthias Daub Partner, McKinsey & Company matthias_daub@mckinsey.com Anna Wiesinger Associate Partner, McKinsey & Company anna_wiesinger@mckinsey.com Supporting team Jutta Schrötgens, McKinsey & Company Tristan Swysen, McKinsey & Company April 2018 Cover image: getty images; people illustrations by Freepik Copyright © Ashoka Deutschland gGmbH und McKinsey & Company, Inc. This work is licensed under a Creative Commons Attribution 4.0 International License (CC BY 4.0, details: http://creativecommons.org/licenses/by/4.0/).
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